You don’t get to be the biggest advisor achieving the highest values for your dental practice clients without a unique strategy. One of LPS advantages is our “insider information” not just in dental, but across the general economy and geopolitical landscape; all which affect the timing of and achievement of the highest practice values.
Take a look at our Advisory Board
Among others, you will see one of the founders of the IDSO concept 30+ years ago, a retired Four-Star Admiral and a nationally renowned tax expert. Their relevance in the articles below.
Admiral Phil Davidson
Recognized as an expert on China, he has predicted some interesting outcomes in the IndoPac region where he was in command of 380,000+ military, DOD, CIA and civilian contractors. His views on the future of Taiwan, while controversial, may prove prescient unfortunately. Read about them here: Ex-U.S. Indo-Pacific commander sticks to 2027 window on Taiwan attack.
Mitch Olan
Mitch is often considered the godfather of the IDSO concept. During his tenure as Chairman & CEO of a 30+ year old IDSO, LPS completed over $250 million of partnerships for our clients with them. ALL of the doctors we partnered with this IDSO starting in 2016 are still there! They must be happy! Part of their satisfaction I would guess is due to a recent recapitalization where the world’s third largest Sovereign Wealth Fund invested a billion dollars in the IDSO Mitch functionally co-founded. Mitch now sits on the Boards of multiple IDSOs, including those founded by Shore Capital. (see below article this week).
This Main Street Billionaire Bought Over A Thousand Small Businesses And Never Lost A Dime
Justin Ishbia, founder of Chicago-based private equity firm Shore Capital Partners, has made a fortune for himself and his investors with a $7 billion portfolio.
The health care-focused microcap investment firm sealed 801 deals from 2020 to 2023, making it one of the world’s busiest buyout shops. Its assets under management soared sevenfold to $7 billion during that period, as stellar returns convinced early investors like the University of Notre Dame and Sequoia Capital’s wealth management arm to steadily boost their commitments. But with its 15th anniversary this year, Shore remains a minnow in the ocean of private equity—where the largest fish, such as Apollo, Blackstone and KKR, oversee more than $500 billion apiece. That’s by design.
Staying small is working out big time: Shore’s average internal rate of return on its 14 exits, all in health care, is 53%, net of fees. That’s nearly triple the average net IRR of U.S. buyout funds raised since 2009, according to data from Cambridge Associates.
Ishbia and his team have acquired more than 1,000 mom-and-pop shops across the country (average cost: $15 million) since Shore’s 2009 founding and rolled them up into 61 larger chains of things including autism treatment clinics, bakeries and exterminators.
Shore then invests in computer systems and equipment, stacks the businesses’ boards with industry veterans and hunts for complementary companies in adjacent markets.
“The private equity world gets a bad rap for ‘buy this, slash that,” says Ishbia. “We are growth—we have almost 35,000 employees and hire thousands per year.”
Notably, Shore Capital is launching another IDSO next month utilizing a large LPS GP client as its platform practice. Our client got a ground floor opportunity with the right investor, with massive equity upside. The initial value was over 10x EBITDA. The long-term gains for this 45-year-old doctor are unlimited.
Forbes, https://www.forbes.com/sites/mattdurot/2024/04/08/this-main-street-billionaire-bought-over-a-thousand-small-businesses-and-never-lost-a-dime-justin-ishbia/?sh=1dfd39e439ee
Another Ground Floor Story
In November 2023, our client in Missouri, age 39, became the platform practice for a new IDSO started by the most successful IDSO investor in history. They have already created over $3.5 billion in value for their investors and doctor partners in the start, build and monetization of seven IDSOs in the last 10 years. And that counts only those already monetized. Others are in their process include two IDSOs with 100+ practice partners, each.
Our client is on the ground floor, shoulder to shoulder with the investors. Early doctors in just one of the IDSOs started by this group have achieved over 16x returns on their retained equity ownership, in about seven years.
These are the types of IDSOs that are NOT on the LPS Blacklist of IDSOs to avoid (about 900 of them to be avoided). Our unique relationship with this investor resulted in a 14x EBITDA initial value for our client, and probably $100+ million of generational wealth over the next 10 years.
LPS achieves record values for clients in 2024 due to our size, insight and experience in billions of dollars of IDSO partnerships created for our clients. With over $1.0 billion completed in just the last 24 months, the doctors under 40 accounted for over $150 million. Dental consolidation is accelerating and every doctor should understand its impact on their practice and community. If you have a larger practice, you will join an IDSO or compete with many!
- DEO Growth Secrets EP 213: 2025 M&A Trends Every Dental Entrepreneur Must Know - November 22, 2024
- Practice Partnership Podcast Ep 13: IDSO Performance in 2024 - November 20, 2024
- Largest IDSO Recapitalization Ever and Post Election Comments - November 13, 2024